Lender changes leaders
Updated: Thursday, November 08, 2012 10:50 AM
Gerber was hired in wake of 2008 financial crisis
By MATEUSZ PERKOWSKI
The Farmer Mac agricultural credit corporation has replaced the CEO who helped the government-sponsored enterprise recover from turmoil during the 2008 financial crisis.
Michael Gerber was hired to head Farmer Mac on an interim basis in 2008 after the corporation removed its previous chief executive, Henry Edelman, and was appointed permanent president and CEO five months later in 2009.
He has been replaced, effective immediately, with Farmer Mac's chief financial officer and treasurer, Tim Buzby, a 12-year veteran of the organization.
Chris Bohanon, spokesman for Farmer Mac, said the corporation's board of directors felt it was the "right time to move on" with a new chief executive.
Last year, Gerber earned about $2.5 million in total compensation while Buzby earned more than $1 million, according to a filing with the U.S. Securities and Exchange Commission.
Farmer Mac ran into trouble in 2008 when the Lehman Brothers investment bank went bankrupt and the operations and assets of Fannie Mae, a government-sponsored mortgage corporation, were taken over by the federal government.
Combined with loan losses in the ethanol sector, Farmer Mac's soured investments in Lehman Brothers and Fannie May resulted in $154 million in losses in 2008.
The corporation was able to get on its feet through a "capital infusion" by Farm Credit System banks, which bought up stock in Farmer Mac, according to filings with the U.S. Securities and Exchange Commission.
Farmer Mac reported net income of $13 million last year and nearly $18 million during the first half of 2012.
The corporation was initially created by Congress in 1987 to improve credit availability in the agricultural industry. Though it was founded by the government, Farmer Mac is owned by stockholders.
The goal of the corporation is to add liquidity to agricultural lenders by buying their farm-related loans and loan-backed bonds.